Employee Tax Codes, Employee tax question???
Discussion
Just wanted to ask some advice on tax codes for my employee.
On his P45 it states his tax code as BR - Basic Rate which takes 20% of his wage as tax. Am I correct in thinking that he may be on the wrong tax code, and if so, what is the procedure to fix it. Is it my obligation as the employer or his to solve this.
Also, what is the easiest way to work out and pay tax and NI contributions. Is it just a matter of using the Inland revenue CD rom to work out both and then pay it to the inland revenue at the end of every month. If my employee is currently paid weekly via cheque, should I be deducting both each week before paying it to the IR on his behalf.
Thanx,
(PS. I'm new to this, lol)
On his P45 it states his tax code as BR - Basic Rate which takes 20% of his wage as tax. Am I correct in thinking that he may be on the wrong tax code, and if so, what is the procedure to fix it. Is it my obligation as the employer or his to solve this.
Also, what is the easiest way to work out and pay tax and NI contributions. Is it just a matter of using the Inland revenue CD rom to work out both and then pay it to the inland revenue at the end of every month. If my employee is currently paid weekly via cheque, should I be deducting both each week before paying it to the IR on his behalf.
Thanx,
(PS. I'm new to this, lol)
You are obliged to use the Tax Code as shown on the P45 provided by the new empl;oyee. If the Code is incorrect, the employee (who is the taxpayer) is the one who should find out why it is incorrect and endeavour to have it rectified.
BR is often shown as a Tax Code when the individual has another PAYE source of income on which they are getting their full tax allowance. The correct "normal" code for an individual should be 603L (£6,035).
Are you a sole trader with an employee or are you a limited company?
BR is often shown as a Tax Code when the individual has another PAYE source of income on which they are getting their full tax allowance. The correct "normal" code for an individual should be 603L (£6,035).
Are you a sole trader with an employee or are you a limited company?
Just to add to this.
My employee says that the tax office that he visited has told him that I, as the employer should call them and they will give me the correct tax code over the phone.
When I called the inland revenue, the 'employer' helpline told me that I should post whichever tax code is on the P45.
The employee helpline then told us that because it is the end of the tax year it will make no difference changing the tax code over from 'BR' to something like '603L'. They also said that any tax previously paid on 'BR' can not be refunded if the code is changed over to '603L'.
If it takes more than a week to get a letter from the inland revenue to change a tax code over to the correct one, there isn't really much point of changing it over. But can the inland revenue tell me over the phone, the new tax code and then when I pay the employees first tax payment I just use the new tax code, and not the one on the P45.
Thanx
My employee says that the tax office that he visited has told him that I, as the employer should call them and they will give me the correct tax code over the phone.
When I called the inland revenue, the 'employer' helpline told me that I should post whichever tax code is on the P45.
The employee helpline then told us that because it is the end of the tax year it will make no difference changing the tax code over from 'BR' to something like '603L'. They also said that any tax previously paid on 'BR' can not be refunded if the code is changed over to '603L'.
If it takes more than a week to get a letter from the inland revenue to change a tax code over to the correct one, there isn't really much point of changing it over. But can the inland revenue tell me over the phone, the new tax code and then when I pay the employees first tax payment I just use the new tax code, and not the one on the P45.
Thanx
Gassing Station | Business | Top of Page | What's New | My Stuff